Commonwealth Bank of Australia (ASX: CBA) Share Price, Forecast and Outlook

Commonwealth Bank of Australia (CBA) heads into the first trading day of December 2025 as one of the most profitable – and most hotly debated – bank stocks on the planet.

After surging to record highs around A$192 in late June, CBA shares have dropped back to the low A$150s, a fall of just over 20% from the peak. As of the close on Friday 28 November, the stock was trading near A$152.5, within a 52‑week range of about A$140 to A$192. ^[1] Algorithmic models such as StockInvest peg a “fair” opening price on 1 December around A$152.9, suggesting only modest near‑term volatility at the open. ^[2]

Yet even after a bruising November – when CBA was singled out among ASX 200 names that fell more than 10% for the month ^[3] – the bank still trades on a price‑to‑earnings multiple close to 29x and a dividend yield of roughly 3%, levels far above most global peers. ^[4]

For investors watching CBA on 1 December 2025, the central question is no longer “Is this a good bank?” but “Does this price still make sense?”

1. CBA share price snapshot on 1 December 2025

Key markers as the market opens for December:

Last close (28 Nov 2025): ~A$152.5 per share ^[5]
52‑week range: ~A$140.2 (low) to A$192.0 (high) ^[6]
Drawdown from June peak: a bit over 20% below the late‑June high near A$192. ^[7]
Trailing dividend yield: about 3.1% based on a record FY25 dividend of A$4.85 per share. ^[8]
Valuation multiples: P/E about 29x, price‑to‑book near 4x, more than double the global average for large banks according to analysts cited by Reuters and fund managers such as Montgomery. ^[9]

These numbers explain why CBA can drop more than 10% in a month and still be described as “expensive”.

2. Record FY25 profit – and why the market still sold off

CBA’s full‑year 2025 results, released in August, were objectively strong:

Cash NPAT: around A$10.2–10.3 billion, a record and up low‑ to mid‑single digits on FY24. ^[10]
Net interest margin (NIM): ticked higher to about 2.08%. ^[11]
Home lending: mortgage book up roughly 6% to around A$600 billion; business lending up about 11% to A$161 billion. ^[12]
Credit quality: 90‑day‑plus arrears on home loans steady around 0.7%, with about 85% of customers ahead on repayments – a powerful buffer in a high‑debt economy. ^[13]
Dividends: final dividend A$2.60 per share fully franked, bringing the FY25 total to A$4.85. ^[14]
Capital: CET1 ratio of 12.3% (APRA Level 2), comfortably above the 10.25% regulatory minimum. ^[15]
Capital returns: on‑market share buy‑back of up to A$1 billion, with A$300 million completed by 30 June and the remainder extended into the next 12 months. ^[16]

Despite the record profit and dividend, CBA’s share price fell more than 5% on the day of the result, dragging the broader ASX lower. ^[17]

Why?

Analysts and fund managers repeatedly pointed to valuation:

ABC News described the market as wrestling with CBA’s “lofty valuation” as falling rates threaten future margin expansion. ^[18]
Montgomery Investment Management estimated that CBA was trading at about 4x book value and nearly 28.5x forward earnings, more than three standard deviations above typical levels for the stock. ^[19]

In short: the numbers were good, but not good enough to support a very rich multiple forever.

3. Q1 FY26 update: solid profit, softer margins, sharp share price reaction

The November quarterly trading update for Q1 FY26 poured a bit more cold water on the bull case.

CBA reported:

Unaudited Q1 cash profit: A$2.6 billion, up about 2% on the same quarter last year, and roughly 1% above the average of the prior two quarters. ^[20]
Operating costs: up around 4%, driven by wage inflation and technology spending. ^[21]
Margins: net interest margin edged lower, with the bank blaming deposit competition, customers shifting cash into higher‑yield accounts, and the lower cash‑rate environment. ^[22]

The market reaction was brutal:

ABC’s live markets blog noted that CBA shares lost around 5–6% on the day, contributing to a soft session for the ASX 200. ^[23]
Reuters highlighted that the stock slid nearly 5% to a fresh four‑week low, while still trading at a P/E and price‑to‑book multiple more than double the global bank average. ^[24]

Broker commentary has been similarly wary. In The Bull’s “18 Share Tips” column dated 1 December, Medallion Financial’s Stuart Bromley slapped a SELL on CBA, calling out a price/earnings multiple around 25x, a modest ~3.1% yield, and signs of NIM pressure and rising costs. ^[25]

4. Dividends, capital strength and the buy‑back

For income‑focused investors, CBA remains a heavyweight:

FY25 dividend: A$4.85 per share fully franked, a record payout. ^[26]
At the recent share price in the low A$150s, that equates to a trailing yield a little above 3%. ^[27]
Morningstar, among others, expects the dividend to grow further, with one forecast pointing to around A$5.25 per share in FY26, supported by the strong CET1 buffer. ^[28]

Digrin, which tracks dividend histories globally, also shows CBA with double‑digit average dividend growth over the last three years and a forward yield estimate in the low‑to‑mid 3% range. ^[29]

CBA’s capital management strategy – high payout ratio, franked dividends and buy‑back – is one reason many local investors are reluctant to abandon the stock, even as international analysts baulk at the valuation.

5. Macro backdrop: hot housing, higher‑for‑longer rates and new lending rules

CBA is tightly lashed to the Australian housing market, and that market has been running hot again.

5.1 Housing prices and credit growth

CBA’s own economic research team reported that:

National home prices rose 1.1% in October, the strongest monthly gain since mid‑2023, taking annual growth to 6.1%.
Perth, Brisbane and Darwin led the gains, with regional areas outpacing capital cities. ^[30]

At the same time:

CBA economists say total new housing lending jumped 9.6% in Q3 2025, with investor lending up 17.6% in the quarter and 18.7% over the year – well above expectations. ^[31]
CBA’s own mortgage book grew about 6% to A$664.7 billion over the year to June, outpacing peers. ^[32]

CEO Matt Comyn has been unusually blunt about this. In testimony to lawmakers in November he argued that current housing credit growth is “too high” and that a slightly slower pace would be better for long‑term financial stability and housing access. ^[33]

5.2 APRA steps in: debt‑to‑income caps

Regulators have noticed.

Late in November, the Australian Prudential Regulation Authority (APRA) announced that from 1 February 2026, banks will be limited to no more than 20% of new mortgages with debt‑to‑income (DTI) ratios of six times or more, applied separately to owner‑occupiers and investors. ^[34]

The move is explicitly designed to head off housing‑related risks while the system is still relatively healthy. Investor loans, now roughly 40% of new lending, have been a particular concern for APRA and the Reserve Bank. ^[35]

For CBA shareholders, the implication is subtle but important:

In the near term, the cap isn’t binding – current high‑DTI lending shares are below 20% – so earnings impact should be modest. ^[36]
Over time, however, it limits how aggressively CBA and its peers can grow their mortgage books at the riskiest, highest‑leveraged end of the market.

5.3 Inflation and interest‑rate expectations

The earlier RBA easing cycle – which took the cash rate down to 3.6% by September – has given way to renewed inflation worries:

Q3 CPI surprised on the upside, with annual inflation back above the 2–3% target range. Reuters reports that the trimmed‑mean measure jumped and that banks such as CBA have withdrawn forecasts for further RBA cuts in the near term. ^[37]
CBA’s own research note “Is higher inflation here to stay?” on 18 November emphasised persistent services inflation and a slower‑than‑hoped‑for return to target. ^[38]

Publicly, Comyn has suggested that the cash rate is more likely than not to stay at 3.6% through all of 2026, absent a sharp deterioration in the labour market. ^[39]

Higher‑for‑longer rates are a double‑edged sword for CBA:

They help maintain margins by keeping loan rates relatively high.
But they also keep mortgage repayments elevated, intensifying political scrutiny and increasing the risk of credit losses if unemployment rises.

6. Strategy, technology and AI: “building tomorrow’s bank today”

Beyond the quarter‑to‑quarter numbers, CBA is spending heavily on technology, especially artificial intelligence.

Key developments in 2025 include:

AI investment ramp‑up: CBA plans to lift annual technology investment by about A$300 million to around A$2.3 billion, part of a multi‑year push to modernise systems and embed AI into customer journeys. ^[40]
Partnerships: The bank has signed multi‑year deals with Amazon Web Services to build an “AI factory” and with OpenAI to provide staff access to enterprise‑grade generative AI tools, while also holding an investment stake in Anthropic. ^[41]
New Chief AI Officer: On 26 November, CBA named Ranil Boteju – formerly Group Chief Data & Analytics Officer at Lloyds Banking Group – as its inaugural Chief AI Officer, effective early 2026. He will sit on the technology leadership team and oversee AI strategy across the bank. ^[42]
External recognition: CBA notes that it ranks #4 globally and #1 in Asia‑Pacific banks in the 2025 Evident AI Index, a benchmark of AI maturity in financial services. ^[43]

At the same time, CBA’s AI ambitions have not been controversy‑free. Media reports through 2025 highlighted job cuts and planned replacement of call‑centre roles with AI tools, prompting backlash and later partial reversals. ^[44]

From a shareholder perspective, the AI push is a long‑term bet: it weighs on costs today, with the promise of lower cost‑to‑income ratios and tighter risk management down the track. Whether investors are willing to pay a premium for that promise indefinitely is another question.

7. ESG, climate and conduct risk

CBA’s record profit has reignited debates about fairness, fees and climate responsibility.

On 13 August, The Guardian reported that:

CBA posted record annual cash profits of about A$10.25 billion and a final dividend of A$2.60 per share.
At the same time, consumer group Choice and others renewed pressure on the bank to refund around A$270 million in fees charged to more than 2 million low‑income customers between 2019 and 2024 – fees CBA has so far declined to fully repay. ^[45]

On climate, the same report highlighted that CBA:

Tightened its environmental and social policies, effectively ending new finance to coal companies that do not have net‑zero‑by‑2050 plans.
Imposed stricter transition requirements on fossil‑fuel borrowers and expanded its broader climate‑risk framework. ^[46]

These themes matter because political and regulatory pressure on “big bank profits” is unlikely to fade while households face high mortgage repayments and a tight rental market. That, in turn, can limit how aggressively CBA can cut service levels or push prices to protect margins.

8. What analysts and models are forecasting for CBA shares

8.1 Broker and analyst views

Across the major broker community, the message is consistent: excellent business, stretched price.

Some key data points as at 1 December:

TipRanks consensus: based on 11 analysts over the past three months, CBA carries a “Strong Sell” rating – 11 Sell, 0 Hold, 0 Buy – with an average 12‑month price target of A$123.15. The target range runs from A$96.07 (bear) to A$146.00 (bull), implying roughly 20% downside from around A$154 at the time of the survey. ^[47]
UBS: maintains a Sell rating with a target around A$125, warning that CBA’s premium valuation leaves it vulnerable if margins compress or credit conditions deteriorate. ^[48]
Morningstar: emphasises CBA’s strong capital position – CET1 of 12.3% – and forecasts a fully franked FY26 dividend of about A$5.25 per share, but still questions the share price given global peers on much lower multiples. ^[49]
The Bull (1 Dec 2025):
- Medallion Financial (Stuart Bromley) lists CBA as a SELL, citing an expensive 25x P/E, modest dividend yield and weaker‑than‑hoped Q1 metrics.
- Red Leaf Securities (John Athanasiou) takes a more moderate line with a HOLD, praising CBA’s quality but arguing that upside is capped by valuation, margin pressure and economic risks such as high household debt. ^[50]

In other words: institutional analysts overwhelmingly respect CBA’s franchise but balk at its price.

8.2 Quant and long‑term forecasts

Computer‑driven forecast sites add another layer:

TradersUnion projects that CBA’s share price could average around A$143–176 in 2026, with a central estimate near A$160, and potentially reach above A$200 by 2029, based on historical performance and earnings‑growth assumptions. ^[51]
StockInvest’s near‑term model estimates a fair opening price on 1 December of A$152.89, basically flat versus the last traded price. ^[52]

These algorithmic forecasts should be treated as scenarios rather than destiny, but they reinforce a key theme: even after recent falls, the market still expects CBA to deliver sustained earnings growth to justify its premium.

9. Key risks and opportunities for CBA shareholders

Putting the pieces together, the current debate around CBA shares can be boiled down to a bullish and bearish checklist.

9.1 Reasons the bulls stick with CBA

Supporters typically highlight:

Dominant market position in Australian retail and business banking, with a powerful brand and technology platform. ^[53]
Resilient profitability with record FY25 profit, high returns on equity and historically low credit losses. ^[54]
Strong capital and dividends, including fully franked payouts and ongoing buy‑backs. ^[55]
Investment in AI and digital that could widen CBA’s lead in customer experience and cost efficiency over time. ^[56]
Macro buffers, such as low arrears and customers ahead on repayments, giving the bank room to absorb shocks. ^[57]

From this angle, the recent de‑rating looks like a familiar pattern: a blue‑chip stock that ran too far, too fast, then corrected back to a still‑healthy premium.

9.2 What worries the bears

Sceptics focus on:

Valuation risk: one of the highest P/E and P/B multiples in global banking, even after a 20% pullback. ^[58]
Limited upside on consensus numbers: with average 12‑month targets in the low A$120s, the analyst community broadly sees more downside than upside from today’s price. ^[59]
Margin and cost pressure: intense mortgage and deposit competition, plus rising technology and wage bills, are starting to squeeze NIM and cost‑to‑income metrics. ^[60]
Regulatory and political headwinds: APRA’s new DTI caps, parliamentary hearings on housing affordability and public anger over bank fees all point to tighter constraints on how CBA can grow and price risk. ^[61]
Macro uncertainty: inflation remains above target, the RBA may need to keep policy tighter for longer, and a weaker labour market could quickly erode today’s benign credit conditions. ^[62]

As one long‑term investor note put it, CBA may be a “wonderful bank at a not‑so‑wonderful price.” ^[63]

10. Bottom line: What 1 December 2025 means for CBA stock

Heading into December 2025, Commonwealth Bank of Australia sits at a crossroads:

Operationally, it remains an exceptionally profitable, well‑capitalised bank with record earnings, strong dividends, a dominant position in Australian banking and an increasingly sophisticated AI strategy. ^[64]
Financially and politically, it is under pressure from high expectations, elevated valuations, regulatory tightening in housing credit, and a public and political environment that is less tolerant of perceived “super profits”. ^[65]

At around the low A$150s, CBA shares still price in a lot of faith that management can navigate slower growth, regulatory change and technological disruption without a major earnings stumble.

Whether that faith is rewarded will depend on three big themes in 2026:

How quickly margins stabilise as competition and funding costs evolve.
How smoothly the housing market cools under APRA’s new lending rules and higher‑for‑longer interest rates.
Whether CBA’s massive AI and technology investments translate into tangible cost and revenue advantages faster than the market currently expects.

For now, the consensus among professional analysts is cautious to negative, even as local income investors continue to prize CBA’s dividends and perceived safety.